Smart Warehousing May 13, 2022 4:51:12 PM 10 min read

Understanding The Benefits of 3PL for Your E-commerce Business

It’s no secret that the business world was heavily transitioning out of brick-and-mortar and into the digital space before the Pandemic's far-reaching impact on communities across the globe. Websites like Amazon made shopping convenient (and — dare we say it — enjoyable!) for consumers. E-commerce businesses removed the hassle of physically hopping in a car, or taking public transportation, and driving to local retail stores to grab a few items off your shopping list.

After the unprecedented onset of COVID-19, however, social distancing and lockdown protocols deterred consumers from entering stores altogether. Cue the mass migration to e-commerce. Even as the Pandemic improves, its impact on consumers is here to stay.

Despite consumers making the bulk of their purchases via online means, there’s still a significant element of physicality to conducting e-commerce operations. From the shopper's perspective, they order their weekly meal kit or re-up their supply of paper towels with a click of the mouse and the package magically arrives a day or two later at their doorstep.

But prepping a product and shipping it out to a consumer isn’t some elusive, magical process. It takes strategic planning, efficiency across your entire supply chain, and logistical experts to pull off such a complex endeavor.

Whether you operate a retail space in conjunction with an online shop or your entire business is built on an e-commerce model, ensuring you have a reliable third-party logistics (3PL) provider to handle everything from order fulfillment to delivery is imperative to profitability and long-term success. And having a firm understanding of how a strong 3PL partnership can move the needle forward for your business is the first step in bringing all the pieces together.

 

What Is a 3PL?

A 3PL — a.k.a a third-party logistics provider — is an outsourced partner that handles your e-commerce company's supply chain and logistics operations.

Think about it like this: if your business operates online, where do you plan on storing the items you’re selling? It’s virtually impossible to assume these responsibilities on your own, unless you’re running a small business that only makes a few sales a quarter and you can store inventory in a spare bedroom. Conversely, your organization may not be large enough to need a national footprint of warehouses in regions from coast-to-coast.

This is where the expertise and agility of a 3PL can transform your e-commerce business. Smart Warehousing provides third-party logistics warehousing, fulfillment, and logistical solutions for more than 600 companies, and we’ve seen firsthand the impact of streamlining operational needs to drive efficiency across the supply chain. Delegating the bulk of the back-end process to a 3PL allows your business to focus on more high-level initiatives, like penetrating new markets or expanding service offerings.

 

How a 3PL Helps Serve E-Commerce

The goal of 3PL for e-commerce is to optimize a business’s operations by outsourcing the logistics process. That’s why companies across industries leverage a 3PL: the right partnership can lead to a seamless fulfillment strategy and a streamlined supply chain. A 3PL can alleviate a large portion of the workload burden, while offering a myriad of advantages for e-commerce businesses.

Improves Supply Chain Management

Keeping your customers happy is the key to driving growth. It’s not just Amazon Prime that guarantees two-day shipping anymore. Big-name brands like BestBuy, Wal-Mart, and others have also jumped on the bandwagon, offering customers quick turnaround times.

Without a speedy order fulfillment process, you run the risk of essentially handing customers over to your competitors. Studies show the shipping experience’s influence on long-term loyalty, as 88% say it directly impacts whether they will be a repeat customer. For e-commerce businesses that get shipping wrong, 90% of consumers say it negatively impacts their perception of the retailer.

Think of a 3PL as the oil in your well-oiled machine. Ensuring a supply chain is managed properly doesn’t need to be done in-house, it can be done with the help of a third-party logistics specialist. This is what we at Smart Warehousing are here for — to help you scale with demand, expand your distribution network (without having to build the infrastructure for it), and provide the technology needed to make data-backed decisions.

Satisfy Inventory Management Needs

Whether your business has several locations across the U.S., or you operate from a single office, it’s pivotal to find a warehouse facility that can accommodate your inventory needs. Because storage needs are imperative: high-volume or temperature-sensitive goods need to be housed in an environment that’s equipped with the resources needed to expertly navigate the rigors of moving a product from its point of origin to a customer’s doorstep.

When a customer makes a purchase online, the product is pulled from the shelves of the warehouse and is packaged and shipped to its destination. What’s more, you’ll have access to real-time inventory insights, ensuring products are accounted for and that demand never outweighs supply.

 

Why Should You Choose a 3PL For Your E-commerce Business?

Of 3PL specialists, 90% have showcased vast improvements in operations for e-commerce businesses, according to data from Korn Ferry. That presents a strong case for partnering with a 3PL. But in addition to driving overall efficiency, there are a few other benefits we know will pique your interest and benefit the bottom line.

Say Hello to Lower Expenses

From overhead expenses, like rent, to hiring individual in-house specialists to perform order fulfillment, partnering with a 3PL for your e-commerce business provides several cost-saving advantages. A valuable 3PL partner will serve as an extension of your team and provide the expertise needed to ensure supply chain operations run as smoothly as possible.

From receiving new customer orders to picking, packing, and shipping, consider a 3PL your one-stop-shop. What’s more, they have the insights needed to streamline processes and make recommendations to help your e-commerce business scale.

Resources Aren’t Stretched Thin

When a company is in charge of its entire supply chain, it’s only natural that resources will get chopped up and divided across a multitude of responsibilities. Think about it like this: do you want only 5% or 10% of effort and attention put into crucial tasks because your resources are stretched thin? Hint: absolutely not.

That’s why a 3PL can be so beneficial. It ensures the right focus and expertise is available to move products through every step of the supply chain. Whether that’s equipment, technology, personnel, or otherwise, it takes the burden off your plate and allows your team to strengthen other areas of your business, such as marketing or advertising.

Execute On Expansion Initiatives

The goal of most businesses is expansion. What happens if your company scales rapidly and you aren’t equipped with the resources needed to accommodate the heightened demand? Fear not, that’s what a 3PL is for. Third-party logistic companies are prepared for your business to scale — whether it’s due to seasonality or you’re tapping into new markets. Imagine the amount of stress that can be alleviated simply by having an outsourced expert handle all the logistics surrounding company growth.

Unparalleled Expertise at Your Fingertips

Smart Warehousing came from humble beginnings in 2001 and since then, we’ve expanded. We have 38 locations across the nation and offer over 12 million square feet of warehousing space. With our facilities strategically placed across the country, we’re able to accommodate two-day shipping to drive customer satisfaction and repeat business.

As a player in the e-commerce space – whether you’re new to the game or not – you’re going to need professionals by your side. Let Smart Warehousing help your company drive profitability and operational efficiency by contacting us today to learn more.